NSW Government’s plan to unlock supply of industrial land
Overview
Stakeholders of industrial development in New South Wales (NSW) will no doubt welcome the Department of Planning, Housing and Infrastructure’s (Department) recent publication of the Industrial Lands Action Plan (Action Plan), which aims to address the shortage of suitably zoned and serviced land for industrial purposes. After what Planning Minister Paul Scully has described as “years of neglect,” the Action Plan represents a statewide approach to unlocking a supply of well-located, serviced, and competitive industrial land across NSW.[1]
As outlined by the Minister, in 2024 alone, industrial-related sectors contributed approximately $174 billion in gross value to the NSW economy.[2] Industrial lands—ranging from depots and warehouses to factories and distribution centres—are considered crucial for delivering construction materials, generating jobs, and facilitating a stable supply chain. The Action Plan is designed to protect, intensify, and better manage these strategic sites.
Central to the Action Plan are four key initiatives:
- Deliver a statewide policy for industrial lands
This involves a consistent categorisation system for industrial areas—designating them as either state significant, regionally significant, or locally significant & other industrial lands. Each categorisation will influence the permissible uses in those areas, the level of protection from competing land uses, and potential for intensification. - Investigate planning and policy interventions
The Department intends to review and consider amending planning controls (such as floor space ratios and height limits) to maximise the use of land identified as state or regionally significant, and to streamline approval processes through updated provisions in the Codes SEPP to ensure they are fit for purpose. - Finalise and release a statewide approach for an industrial lands supply pipeline
By refining the metrics used to forecast industrial land “take-up” rates, the Government aims to maintain a healthy supply of development-ready land. This new statewide approach—expected by mid-2025—will guide future rezoning decisions and private-sector investment. - Create an Employment Land Development Program
A dedicated program is planned to coordinate infrastructure investment and monitor a rolling 10+ year pipeline of industrial land. Early efforts will focus on servicing existing, zoned industrial areas that can support freight and logistics, before expanding to other emerging sectors.
Implications
The Action Plan signals a shift away from the more fragmented, local and region-specific frameworks that have governed industrial lands to date. Once the new statewide policy comes into effect, it is expected that existing approaches to the development of industrial land, such as the “Retain and Manage” policy in Greater Sydney will be replaced.[3]
For developers, the prospect of clearer classifications and intensification controls could simplify planning pathways—particularly for projects seeking to expand or modernise existing industrial operations. For landowners, the Action Plan indicates that once lands are categorised, protections against uses that are incompatible with industrial land uses should improve (in the case of state and regionally significant sites), whilst underutilised or isolated industrial sites could be earmarked for alternative employment or, in limited circumstances, residential uses.
Importantly, the Action Plan emphasises coordinated infrastructure investment, promising better transport, freight, and utilities servicing in prioritised industrial areas. This is expected to provide greater certainty to the market and facilitate more cost-effective development—ultimately helping to keep downward pressure on the cost of goods and on the materials needed for new housing construction.
It is hoped that the Action Plan will go some way to ensuring that industrial developments are not proposed in inappropriate locations, as the supply of more suitable industrial lands across the State increases.
As the proponent of what would have been the largest plastics recycling facility in Australia recently learned the hard way when the Independent Planning Commission refused its State significant development application, not all industrial zoned land is actually suitable for certain industrial development types, particularly heavy industrial uses, where such land is located in close proximity to highly sensitive land uses. Unlocking industrial lands which are appropriately situated in proximity to services and infrastructure and away from sensitive uses is clearly in the interest of all stakeholders.
What’s Next
Upcoming notable milestones for the delivery of the Action Plan include:
- Early 2025 – Proposed reviews of the Codes SEPP and development of updated design guidelines for industrial lands.
- Mid-2025 – Release of statement approach for industrial lands supply pipeline and publication of priority employment areas selection rationale and infrastructure investment pipeline.
- Late 2025 and beyond – Ongoing tracking of emerging trends, reassessment of infrastructure funding to ensure Government investment decisions can be made in timely manner.
Targeted stakeholder engagement by the Department has been forecast, including engagement with other state agencies, councils, peak bodies and industry. Those with interests in industrial development should monitor the Department’s announcements.
Contact a member of our Planning and Environment team to discuss how the Action Plan may open up opportunities for your next industrial development.
References
[1] Industrial Lands Action Plan, Department of Planning, Housing and Infrastructure (2025)
[2] Minister for Planning and Public Spaces Paul Scully, Media Release (2025)
[3] Greater Sydney Region Plan (2018), ‘Retain and Manage’ policy for industrial lands
This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.